Transformation, experiences, showrooms and Relate to Reality. These are the four overall trends that Frank Heskjær brought back from Mapic. The retail industry is facing changes that make heavy demands on landlords and the industry as a whole.
He noted the following focal points, all of which were fiercely debated during the fair.
Transformation of tenant types
The major chains are starting to close shops, they are cutting down on floor areas, and they are moving locations. The tenant mix in which landlords will have to put their future faith is transforming. Space in pedestrian streets and large shops is becoming vacant as online shopping increases. As a result, more fashion and sports shops are closing or downsizing, but we are also seeing a wave of new tenant types such as housing, interior, kitchen and lifestyle stores, which are moving back into town centres after a long hiatus. In addition, beauty parlours, hairdressers, personal trainers and coaches and tattooists may occupy more of the excess floorage, as they offer services customers cannot buy online.
Shops that resemble showrooms will be more visible in future. Tesla is looking for larger showrooms in major European cities, and it is hardly inconceivable to envision a future where retail premises have two or three Tesla models, accessories and a shop assistant on hand to give the necessary information as inspiration.
Relate to Reality
Tenants will increasingly demand flexible leases, which will put demands on landlords. Tenants increasingly prefer revenue-based rent over more traditional fixed rent. This requires tenants and landlords to cooperate more closely, so that both parties ultimately enjoy the largest possible financial gain in the tenancy relationship. Consequently, landlords must to a greater extent consider the structure of their leases, and the following factors are worth taking into account: Should rent be revenue-based? How long is the tenant’s period of non-terminability? Should the landlord be awarded bonuses if the criteria for the lease are met? Flexible leases put pressure on the traditional terms and conditions, and the longer a landlord waits, the more expensive it may turn out to be.
Experiences and inspiration
The retail industry is putting a bigger premium on experiences, which partly outcompete traditional trade. Experiences connected to purchases are gaining importance, and the product or the price in itself is not what determines a success or a failure. Unconventional experiences, in particular cultural events (art, music, dance) that include museums, travels and concerts, are becoming a growing part of retail. The point is to give customers an exceptional experience they cannot get online. Several successful shopping malls in Europe have adopted the trend, offering specific events every day of the year, where – without having to pay extra – customers can enjoy the usual shopping facilities as well as greater experiences.